Morning Minute | NFT Companies Face New Issue
Take a minute to catch up on the latest in the Web3 space with today's NFT market analysis, top movers, and upcoming mints.
TylerD's Market Summary
A new problem is surfacing for the largest PFP NFT companies - their visions don't align with their current holders.
🙈 NFT Brands Lack Product Market Fit
It's no secret that most NFT floors are down, and down bad.
In fact, the entire NFT market cap is at just $6.6B right now, back to early 2023 levels (and means the entirety of NFTs wouldn't crack the top 10 list of cryptocurrencies by mc).
There are multiple factors at play here, but one issue is beginning to stand out.
The major PFPs don't have strong product market fit.
Two strong recent examples proving this point - Yuga's The Forge and the Azuki Elementals and AMA debacle.
The Forge Is Forsaken
Yesterday, Yuga's highly anticipated new mini-game The Forge went live.
Just the day before, they had released a game guide and an explainer video, and reactions had been mostly positive.
The hype was strong enough to send the primary NFT tied to the game, the HV-MTLs, up 20% over the 0.8 ETH threshold.
But then the game went live, and holders actually started playing it.
And largely hated it.
The floor fell off a cliff, down 29% on the day to 0.6 ETH.
Common sentiment regarding the game is that it is boring and too time intensive, making it especially hard for those who held several of the NFTs to manage playing the game ("it would be a full-time job").
This reaction should not be surprising though.
Because Yuga's NFT holder base is not made up of gamers.
While I don't have data breaking down their holder base, anecdotally Yuga NFT holders seem made up of:
1) early NFT adopters who held
2) whales and traders that flocked to one of the highest marketcap NFTs and
3) those who wanted to be part of the "digital country club" that is Bored Ape and Mutant Ape Yacht Club.
The problem is, Yuga's primary vision right now is launching a series of games leading up to the launch of their MMORPG / metaverse The Otherside. They are becoming a gaming company, which their recent executive hires back up.
But their current holders aren't gamers. They don't have organic interest in playing these games, and will only do so with major incentives (i.e. large prizes) and even those might not be enough.
This ecosystem is in trouble until its holder base aligns more with the company's vision (which may never even happen). And the asset prices are reflecting this problem.
Azuki is facing a similar issue.
Azuki's Anime Alignment (or lack thereof)
Azuki had a disastrous launch of their new Elementals NFTs this week, with the Elementals art seen as too similar to the OG Azuki art and thus dilutive.
The Azuki floor fell 50% in the days to follow, and the Elementals floor is now below its 2 ETH mint price.
There are more issues at play here, including lack of foresight, a rushed launch, and the exposure of a lack of a "grand plan."
But another problem has surfaced in this ecosystem - the primary vision is now to become an anime company.
And it doesn't seem like the average Azuki NFT holder is a major anime fan.
In the AMA yesterday, the Azuki team shared that the primary item they're working on in the next 12 months is a short-form Anime series.
The series will use characters from Azuki and Elementals - but when asked if holders would receive a potential cut of any profits via IP licensing, they dodged the question.
So if the anime series does in fact take off, the Azuki team will be the primary winners.
It's a misalignment in holder interests vs the team.
And once the dust settles on the Elementals expansion and holders take a look at the Azuki roadmap and what's coming next, many may decide it's not really for them.
This is not necessarily a new issue in the NFT space, but perhaps it's surfacing more now that the bubble has burst, we're in a deep bear market, and everything is under the microscope.
Maybe this major issue will be resolved and teams will change course, or maybe I'm overblowing it.
But right now, it's hard to see a path for any of the major PFP brands to return to their prior prices (or anywhere close).
🚚 What else is happening in NFTs?
Here is the list of other notable headlines from the day in NFTs:
- Trading volume came in over 17k ETH on Thursday, down significantly from Tues-Weds; NFTs saw mostly red
- The Azuki floors all fell after the team's community AMA on Thursday night, with Azuki at 8.54 ETH (-7%), Elementals at 1.43 (-13%), Elemental Beanz at 1.84 ETH (-10%) and Beanz at 0.53 ETH (-19%)
- ZK Shark's OMB project sold 1,900 new "Green Eyes" Ordinals at prices ranging 0.09 BTC to 0.29 BTC, with the floor holding at 0.27; "Blue Eyes" jumped to a 3.4 BTC floor on the day
- DeLabs shared a video teasing July 2023 as a key date and launching an updated website
- Wednesday's Art Blocks x Pace drop "World Flags" is holding at 1.28 ETH floor after a 0.33 ETH mint out, a near 4x for minters
- Wolf Game is launching "The Peak" sometime this week as an all-or-nothing player versus player (PvP) arena that offers $WOOL prizes; initial games at The Peak include Wolf Wits, Tug of WOOL, and WATER Wall
- Fxhash is making a major change with its upcoming 2.0 version launch, introducing Ethereum integration and on-chain minting options for both Tezos and Ethereum
- PartyDAO is debuting an on-chain art competition, with entrants splitting into two teams to battle to produce the most popular NFT (with ETH prizes)
- Magic Eden is collaborating with Helio Pay to launch the first-ever multi-chain presale platform for creators
🌎 Around Crypto and Web3
A few other Crypto and Web3 headlines that caught my eye:
- The crypto market was up on the day; BTC +0.5% to $30,800; ETH +1.2% at $1,890
- Fidelity ($4.2T in AUM) re-filed for a spot BTC ETF yesterday, and the CME is planning to launch ETH/BTC ratio futures on July 31 if they receive regulatory approval
- Overlord is collaborating with Immutable to bring Overlord's AAA game on Immutable, the top web3 gaming platform on ETH (home to Gods Unchained)
- Candy Digital announced a merger with the web3 technology studio Palm NFT, with the goal "to continue to build the future of fandom"
🚀 NFT Total Volume
- Azuki (6,722 ETH, 8.55 ETH Floor)
- BAYC (3,944 ETH, 36.3 ETH)
- Azuki Elementals (1,756 ETH, 1.44 ETH)
- Azuki Elemental Beans (1,644 ETH, 1.84 ETH)
- MAYC (1,468 ETH, 7.12 ETH)
📈 NFT Floor Price Increase
- Shiboshis (48%, 0.35 ETH Floor)
- Alpha Gardeners Pass (29%, 0.59 ETH)
- CyberKongz (28%, 1.55 ETH)
- Sproto Gremlins (23%, 0.3 ETH)
- Fluf (19%, 1.02 ETH)
🗓 Upcoming NFT Mints and Reveals
Today is another huge day in NFTs, wrapping up a crazy week.
First, ETHER is starting its week-long mint process with whitelist holders able to mint today for either 0.35 ETH or free (with an 8-week hold). The public sale comes next week though so secondary volume may not be large until then.
The wildcard today is if/how Captainz will reveal. The rumor is a reveal is coming by end of June, and well that's today. It could be just another stage, which would be a non-event, or a full reveal which could lead to some fireworks (and likely a floor dip).
So much for a slow summer weekend - this one might be action-packed!
If you want more, see the full list of today's drops from Swizzy's daily mint monitor.
- Memes by 6529 (11:00 a.m. ET); 0.06529
- Ether (11:00 a.m. ET); 0.35 ETH
- Bitcoin Whales (11:00 a.m. ET); BTC
- Cath Simard - Above The Noise (1:33 p.m. ET)
Enjoy this write-up? Follow along with me on Twitter @tyler_did_it or reach out via email email@example.com.
For all volume and floor price data, see Lucky Trader's Project Rankings page.
For all upcoming mints, see Lucky Trader's NFT Calendar page.